Tax Debt Installment Agreements

December 23rd

There are generally considered to be five different ways of approaching a tax debt situation with the IRS, but the most common is to set up an installment agreement or repayment plan. Underneath the heading of installment agreements, there are four different types. What follows is a snapshot overview of the four different installment agreements people usually pursue when looking to pay off IRS debt.

Guaranteed Installment Agreements

If financially able, the best way to pay off IRS debt is through a guaranteed plan. The biggest benefit of using a guaranteed installment agreement is that the IRS will not be able to file a federal tax lien against you. Because of this, credit bureaus will not have any knowledge of your situation and it will not adversely affect your ability to obtain credit.

Streamlined Installment Agreements

If you can agree to pay off your tax debt balance in 72 months or less, and have a balance less than $50,000, the IRS will approve you for a streamlined installment agreement. Again, in this situation a federal tax lien will not be placed on you because of your tax debt.

Partial Payment Installment Agreements

This agreement is good for people who are not financially able to meet the minimum payments in the previous two agreements to pay off their IRS debt. Under this plan, you will be able to set up a longer payment period with monthly payments based on what you can afford.

Non-Streamlined Installment Agreements

Non-streamlined installment agreements are available if you cannot meet the requirements of the other three agreements. You will need to speak with an IRS agent to discuss your tax debt and financial situation and should seek out a tax lawyer to speak with the IRS on your behalf.